Article excerpt

MOSCOW - Vladimir Putin's economic program, which he has promised to reveal by the March 26 election, will please Western lenders with deregulation proposals but alarm them by strengthening the states' role in the economy.

Experts drafting the program say it will include economic liberalization as demanded by the West. But they said while Mr. Putin, who is acting president and considered a shoo-in in the coming polls, is eager to sweep away some of the Soviet-era bureaucracy that bedevils private commerce, he also wants to boost state intervention in the economy.

"We must end an omnipresent state control of businesses," said German Gref, the head of the Center of Strategic Research, the Moscow-based think tank developing Mr. Putin's program. But the "state's role must be increased" as well, he said in a radio interview.

Mr. Putin has promised to release his economic blueprint before Russians go to the polls, but has not said exactly when that will happen.

Mr. Putin insists that he will continue with market reforms, but there is no alternative but to expand the state's economic oversight to ensure everyone gets a fair break and that laws are enforced.

But pro-reform critics maintain that Mr. Putin is at heart a statist and not interested in throwing the economy open to genuine competition.

They also argue he is surrounding himself in the Kremlin with mediocre bureaucrats and former KGB agents who lack understanding of modern economics.

Mr. Putin has received some support from pro-reform quarters.

Andrei Ryabov, an analyst with the Carnegie Endowment, has argued that state assertiveness will be necessary to overcome the stranglehold on the economy by the small group of superrich "oligarchs" that was enriched in the years under former President Boris Yeltsin through sweetheart deals and privatization bids.

"It will be necessary to build a strong executive political apparatus of vertical governance, relieving the president from the oligarchs' pressure," he wrote in a recent analysis. …

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